Alex Cheatle, Ten Group

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Since founding lifestyle concierge service Ten Group in 1998, Alex Cheatle has put one goal at the focal point of his company mission: to foster unequivocal faith in Ten Group’s ability to put their members’ interests before everything else – including profit

“We want to be the most trusted service business in the world,” Cheatle tells Director, in a small conference room in the corner of a vast open-plan space in which an army of ‘lifestyle managers’ is fulfilling Ten Group’s clients’ whims and wishes – everything from restaurant reservations to travel plans to sought-after theatre tickets.

“If we have to decide between doing the right thing by our members and making the most money, we do the former, even if it doesn’t make the most financial sense in the long term. Serving our members must not become a marketing calculation, or we’ve lost the soul of the business. Our staff and members would both pick up on that quickly. You can’t expect to be considered trustworthy if you have one story for members and one story for your shareholders and employees.”

Having started out 16 years ago as a two-man outfit consisting of Cheatle and his younger half-brother Andrew Long, the two of them working from a small London flat with a couple of laptops, the company has grown into an international concern with more than two million members. It operates in four continents in 24 languages, 24/7, with over 400 staff.

The firm’s recent growth – a 2012 revenue figure of £16m rose to £17m the following year, and at the time of writing they’re predicting the figure to be £20m for 2014 – has been sturdy, and looks set to continue. As well as individuals, Ten Group now services the top clients of banking giants such as NatWest and Barclays, plus multinationals including Microsoft (“It helps them with retention, acquisition and being able to relate to their customers,” says Cheatle). Testimony to the benefits of his focus on customer trust is the fact that more than 95 per cent of new members come directly from referrals by existing members. But it has not been an easy ride:

“We set the business up to change the way the world worked within three years,” says Cheatle. “We were modest in our means but ridiculously ambitious. Now, having just hit our 16th anniversary, we’re finally doing it.”

Niche-carving venture Cheatle’s commercial odyssey began aged 13, when he launched his first enterprise (“a new character class for Dungeons & Dragons – very geeky,” he admits). He set up two more businesses while studying politics, philosophy and economics at Oxford University, and believes that his entrepreneurial instinct comes, at least in part, from childhood experiences.

“I’m struck by the number of entrepreneurs who have had some kind of calamitous incident in their early years – often losing a parent,” he says. “In our case it wasn’t anything as bad, but my parents separated when I was about three-and-a-half. Plus, we were brought up to be very independent.”

As a young man, Cheatle did stints as a curtain cloth salesman in an east London market and as a cowhand in Brazil. It was during this globetrotting phase, in 1998, that he endured a horrific bout of malaria – something that proved another catalyst.

“There was a moment when I thought, ‘My god, I’m going to die because I’m too ill to hit the button that’s going to call an emergency nurse in the hospital,’ ” he says of his recovery period in California. “When you come through that you think, ‘God I’ve got to make the most of this, and go for it.’” A business idea had been percolating in his mind throughout his travels, and by the time he returned home, he had drawn up plans for an original, niche-carving venture.

“The lightbulb moment was a realisation of two things,” he says. “Firstly, that in the 21st century there was going to be much more choice and so much more demand on people’s time that trust was going to be at an absolute premium. The second thing was that digital technology would allow a business to deliver a personalised service effectively for the first time, because you could use it to manage the complexities of looking after individuals, answering hundreds of thousands of requests a month.”
Jet-and-luxury-car
So how did the brothers fund their venture in those early days?

“Credit cards, personal loans and keeping the costs down,” he says. “The first year was really tight. Then we raised money in an enterprise investment scheme (EIS) round from our first members, many of whom were either entrepreneurs or people from the City, who understood the joy of EIS investment and what we did, and so they invested. That’s when we raised our first million, and started growing the business.” Multicultural outlook The business is now flying high, but Cheatle admits there was a blip in the company’s advancement, around 2003.

“When we first grew from being 30 people to 100 people, processes took over a little,” he says. “We did, for a moment, become a company where following process became more important than doing what was right for the individual member. It was scary how easy it was for that to happen. Once we realised it was happening, we went back down to basics.” At the core of Ten Group’s modus operandi is what the company refers to as its ‘Intelligent Support Model’: a clever, have-your-cake-and-eat it approach to customer service.

“When we set up, there seemed to be a choice between a call centre model or a professional support model, like you get from your lawyer or your doctor, where they see you face to face and give you their advice,” says Cheatle.

“The call centre model is very scaleable but frustrating to work with – and poor at responding to the individual. The professional support model is difficult to scale – it’s expensive, clunky and doesn’t use technology well. We decided that we needed people with the individual excellence of a professional, but using technology that makes that service scaleable. A Ten Group employee is given a massive amount of tools, resources, knowledge, content and buying power with which to do their jobs.”

The buying power he’s referring to is enhanced by Ten Group’s ever-increasing ubiquity: it has opened offices in cities including New York, San Francisco, Mexico City, Shanghai, Hong Kong, Singapore, Tokyo, Cape Town, Mumbai, Dubai, Brussels, São Paulo and, most recently, Melbourne. Highly conducive to such expansion, he says, is starting out with an international mentality.

“So we set up our technologies, culture, systems and our whole organisational structure around being global. We’ve always described ourselves as an international business, even when we had 10 employees and all of our clients were in London – that informed our thinking, how we set our own expectations, the technologies we invested in, how they would work and so on.”

Also key is a multicultural outlook. “In the UK, you can hire people from all over the world, and that’s a fantastic resource,” he says. “So when we launched in China, our first employees there were Chinese but had worked for us for three or four years – so we trusted them completely. With America, South Africa, every other major office, we’ve seeded the local office with people from an existing Ten Group office. We’re hoping that the UK doesn’t become immigrant unfriendly – that’d hold back the growth of business success stories internationally. It’s un-British and short-sighted.”

It’s revealing he should mention myopia, as Ten Group’s core philosophy goes against the grain of what much of the commercial world thinks of as long-term thinking. It’s a firm where financial targets are secondary (there’s a subscription-based model, devoid of staff commissions). Staff are incentivised and rewarded on feedback, rather than quantifiable targets.

Instead of a marketing department, a team keeps tabs on existing clients’ reactions to their work (“Why spend money on marketing when we can spend it on getting better?” as Cheatle puts it). His theory is that organic marketing, and success, will come naturally as a by-product of excellence. The group even claims to channel every penny of commission it makes from airlines, hotels and other associates back to its members.

It’s not the easiest concept to sell to traditionalists, and Cheatle seems proud that younger people seem to ‘get’ his business model, while older peers furrow their brows in confusion when he explains the ethos. But it’s working: “We’re now in a virtuous cycle,” he says, “whereby as we get bigger we drive better prices to our members, have more knowledge, acquire more contacts and more experts around the world available at the touch of a button…”

Could it be that Cheatle’s vision is the future? All we can know for certain at this stage is that, for Ten Group, profit and growth are not a primary aim but a collateral effect of transparency and integrity. And the figures speak for themselves.

tengroup.com

About author

Nick Scott

Nick Scott

A former editor-in-chief of The Rake and deputy editor of the Australian edition of GQ, Nick has had features published in titles including Esquire, The Guardian, Observer Sport Monthly and Rolling Stone Australia and is a contributing editor to Director magazine. He has interviewed celebrities including Hugh Jackman, Daniel Craig and Elle Macpherson, as well as business people including Sir Richard Branson, Charles Middleton and Nick Giles and Michael Hayman MBE.

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